Chapter 7 bankruptcy laws went through a major overhaul in the recent past which has put a serious crimp in many people's plans to start over. The new laws that were put into effect regarding what is chapter 7 bankruptcy options will substantially increase the number of chapter 13 filings since it is now much harder to qualify for chapter 7. The tough guidelines enacted by lawmakers will quash manipulation of the system by those who wish to wipe out debts that were incurred with no restraint. While many people suffer serious financial hardships at no fault of their own, those who have stacked unreasonably large debt upon debt will now be forced to face the music by submitting to the guidelines of a chapter 13 filing instead.
For those who are considering filing for bankruptcy, it is important to understand what is chapter 7 bankruptcy when it comes to the law. According to the new laws, several things can qualify an individual for this filing and an assessment is made by the courts as to a person's financial circumstances. The IRS has certain allowable limits for necessary living expenses that are assessed such as food and housing. Generally, the food allowance is around $210 and the housing allowance may be upwards of $900. Anyone who spends more than that cannot qualify for chapter 7 bankruptcies. Also, an assessment called a 'means test' is transacted and an individual's earnings are calculated minus a housing and food allowance.
If the subtracted amount of income if less than the mean income in that state, an individual may qualify to file, if not, filing for a chapter 13 will be mandated. These two particular laws put a stop to many people who would otherwise have filed for bankruptcies. When a person files, the current chapter 7 bankruptcy laws determine whether or not he or she must be denied and passed on to a chapter 13 filing. Up until now, many individuals would rather have avoided a chapter 13 because of the strict financial accountability and reorganization of personal finances that become court mandated. For those whose ask, "What is chapter 7 bankruptcy?" the answers have changed as a result of even more legal restraints.
Other changes to chapter 7 bankruptcy laws include restrictions on filing in any state unless a person has been a residence for at least two years. Other changes include mandatory financial counseling and expensive items purchased or cash loans received within 60 days of a petition will have to be repaid in full. In the past, many people attempted to take advantage of some states protective laws regarding assets such as homes and property. In some states, liquidation of personal homes as a result of filings are prohibited. Before filing a petition, some people have moved across state lines to file in another state in hopes of receiving the benefits of that state's laws. Under the new laws, that is no longer possible.
Those who discover more about what is chapter 7 bankruptcy laws will find that financial counseling will be imposed on anyone who advances through the process of filing. Within six months, mandatory counseling must take place as directed by the court. This new requirement of current laws has created an accountability factor that will undoubtedly prove to be useful in resolving debt and educating consumers. An important part of legislation that was enacted that helps creditors is the fact no one is allowed any longer to run up large bills on luxury items or receive cash advances within the last two months before filing for chapter 7. In the past, it has been noted that many people have premeditated their expenditures on luxury products just before filing. They have had their debts written off, but their creditors are left holding the bag. It has proven to be a scam of sorts and current chapter 7 bankruptcy laws have put a stop to that practice. "Submit yourselves to every ordinance of man for the Lords sakes..." (1 Peter 2:13a)
The purpose of allowing petitions to be filed through the courts was originally to provide a way for people to have a new lease on life after suffering serious financial setbacks. Over the past years, the original purposes for bankruptcies have been distorted. In order to halt unfair use of the laws, the recent legal requirements have been passed. Now, many people will be required to file a chapter 13 petition instead which will require greater accountability, repayment of most debts and mandatory fiscal responsibility. In order to understand what is chapter 7 bankruptcy requirements for individuals who wish to file, there are many online sources that can further expand the topic for anyone who needs assistance.
http://www.christianet.com/bankruptcy/chapter7bankruptcylaws.htm
Wednesday, August 29, 2007
Chapter 13 Bankruptcy Laws
Chapter 13 bankruptcy laws have been changed to require more tests, which make qualification for filing more difficult than it was before. Of primary importance is the new disposable income test. Debtors must have regular income to qualify, and must propose a three- or five-year plan and show an ability to pay to the plan for the entire time. Under the old laws, judges were allowed to determine the reasonableness of living expenses according to individual circumstances and historical data. The new Chapter 13 bankruptcy laws require the judge to calculate disposable income based on a single standard for an approved budget for all people with no allowance for special needs, disabilities, incapacities, or costs of commuting.
Apparently, it was abuse that spurred the passage of the new Chapter 13 bankruptcy laws. Now, anyone considering filing under any of the various legal channels must attend an approved course that provides credit counseling, budget investigation, and financial analysis, and the course must be concluded within 180 days before filing his case with the Bankruptcy Court. There are no guidelines in the law for how much should be charged for tuition for this course, but there are free classes online, and some nonprofit organizations that are subsidized by major credit card companies are offering the course. For the attentive student, the course should give an improved vision of his or her financial status and goals, and the tools for avoiding getting into financial trouble again. This is significant, since the Chapter 13 bankruptcy abuse lawmakers were particularly concerned about was repeated filings of petitions by an individual.
Chapter 13 bankruptcy abuse under the new laws is probably not impossible, but very much less likely to happen. If there is a presumption of abuse by someone filing under Chapter 7 (which would wipe the slate clean), his case will automatically be changed to a 13 (requiring a plan of payment). The presumption of abuse depends upon the outcome of the means test now in place. Debtors who net more every month than their state's median income would be subject to a means test. If the debtor has at least $166.67 in current monthly income after the allowed deductions, abuse is presumed no matter the amount of the debtor's unsecured debt; or, if the debtor had at least $100 of such income, abuse is presumed if he has sufficient funds to pay at least twenty-five percent of non priority unsecured debt over five years. There is a clause that allows rebuttal of the presumption of abuse if there are detailed documents proving special circumstances requiring additional expenses, or adjustment of current monthly total income.
IRS standards are used to calculate what debtors can claim as monthly living expenses, which would include food, clothing, personal care, and entertainment, depending on the debtor's family size. An increase up to five percent of that national standard can be allowed if it can be shown that it is reasonable and necessary. The new Chapter 13 bankruptcy laws require the debtor must file a certificate of credit counseling and repayment plan within 180 days of filing. (This requirement is waived for debtors who are disabled, incapacitated, or on active duty in a military zone.) The debtor must also submit the following: (1) a statement demonstrating debtor has received and read Sec. 342(b) notice; (2) pay stubs for the previous 60 days; (3) a statement of projected income after discharge or dismissal of the case, or increases in expenditures; (4) itemized monthly net income; (5) his most recent IRS return; (6) provide tax returns each year of the proceeding; (7) an annual income/expense statement; (8) disclosure of qualified education savings accounts and tuition programs; and (9) if requested by trustee, a photo ID. (Whew!) And that isn't all. Debtors must perform their intent to surrender, reaffirm, or redeem debt secured by property of the estate within 30 days after the first date set for the meeting of creditors. There are some other provisions fitting particular circumstances, and the best source for that information would be a good attorney. In fact, having a good attorney may be the only way to completely avoid the pitfalls of inadvertent Chapter 13 bankruptcy abuse.
Previous Chapter 13 bankruptcy abuse has been addressed by several provisions, and they are: increased protection for secured debtors; prompt filing of schedules and other information; adjustments to ensure that creditors receive notice of filings; require plans to extend for five years for debtors with incomes over the statutory limit; and limit the shelter to real estate assets. Also the time between filing Chapters 7 and 13 has been expanded to eight years. Further, non dischargeable debts have been expanded. The Court has to trust that the debtor will comply with the requirements under the law, and the debtor trusts that he will be protected and his work will be appreciated. Scripture mentions trust in the Lord: "The LORD recompense thy work, and a full reward be given thee of the LORD God of Israel, under whose wings thou art come to trust." (Ruth 2:12)
Clearly, the new Chapter 13 bankruptcy laws have made filing under that provision more difficult, and have given greater protection to creditors. For debtors who are in the position of really needing the protection of these provisions for getting out from under an excessive debt burden, this is probably not a total deterrent. Good attorneys will be able to evaluate an individual's position and explain the requirements thoroughly, so one can navigate the proverbial rough waters with some certainty. On the other side of the coin, Chapter 13 bankruptcy abuse should certainly be substantially reduced.
http://www.christianet.com/bankruptcy/chapter13bankruptcylaws.htm
Apparently, it was abuse that spurred the passage of the new Chapter 13 bankruptcy laws. Now, anyone considering filing under any of the various legal channels must attend an approved course that provides credit counseling, budget investigation, and financial analysis, and the course must be concluded within 180 days before filing his case with the Bankruptcy Court. There are no guidelines in the law for how much should be charged for tuition for this course, but there are free classes online, and some nonprofit organizations that are subsidized by major credit card companies are offering the course. For the attentive student, the course should give an improved vision of his or her financial status and goals, and the tools for avoiding getting into financial trouble again. This is significant, since the Chapter 13 bankruptcy abuse lawmakers were particularly concerned about was repeated filings of petitions by an individual.
Chapter 13 bankruptcy abuse under the new laws is probably not impossible, but very much less likely to happen. If there is a presumption of abuse by someone filing under Chapter 7 (which would wipe the slate clean), his case will automatically be changed to a 13 (requiring a plan of payment). The presumption of abuse depends upon the outcome of the means test now in place. Debtors who net more every month than their state's median income would be subject to a means test. If the debtor has at least $166.67 in current monthly income after the allowed deductions, abuse is presumed no matter the amount of the debtor's unsecured debt; or, if the debtor had at least $100 of such income, abuse is presumed if he has sufficient funds to pay at least twenty-five percent of non priority unsecured debt over five years. There is a clause that allows rebuttal of the presumption of abuse if there are detailed documents proving special circumstances requiring additional expenses, or adjustment of current monthly total income.
IRS standards are used to calculate what debtors can claim as monthly living expenses, which would include food, clothing, personal care, and entertainment, depending on the debtor's family size. An increase up to five percent of that national standard can be allowed if it can be shown that it is reasonable and necessary. The new Chapter 13 bankruptcy laws require the debtor must file a certificate of credit counseling and repayment plan within 180 days of filing. (This requirement is waived for debtors who are disabled, incapacitated, or on active duty in a military zone.) The debtor must also submit the following: (1) a statement demonstrating debtor has received and read Sec. 342(b) notice; (2) pay stubs for the previous 60 days; (3) a statement of projected income after discharge or dismissal of the case, or increases in expenditures; (4) itemized monthly net income; (5) his most recent IRS return; (6) provide tax returns each year of the proceeding; (7) an annual income/expense statement; (8) disclosure of qualified education savings accounts and tuition programs; and (9) if requested by trustee, a photo ID. (Whew!) And that isn't all. Debtors must perform their intent to surrender, reaffirm, or redeem debt secured by property of the estate within 30 days after the first date set for the meeting of creditors. There are some other provisions fitting particular circumstances, and the best source for that information would be a good attorney. In fact, having a good attorney may be the only way to completely avoid the pitfalls of inadvertent Chapter 13 bankruptcy abuse.
Previous Chapter 13 bankruptcy abuse has been addressed by several provisions, and they are: increased protection for secured debtors; prompt filing of schedules and other information; adjustments to ensure that creditors receive notice of filings; require plans to extend for five years for debtors with incomes over the statutory limit; and limit the shelter to real estate assets. Also the time between filing Chapters 7 and 13 has been expanded to eight years. Further, non dischargeable debts have been expanded. The Court has to trust that the debtor will comply with the requirements under the law, and the debtor trusts that he will be protected and his work will be appreciated. Scripture mentions trust in the Lord: "The LORD recompense thy work, and a full reward be given thee of the LORD God of Israel, under whose wings thou art come to trust." (Ruth 2:12)
Clearly, the new Chapter 13 bankruptcy laws have made filing under that provision more difficult, and have given greater protection to creditors. For debtors who are in the position of really needing the protection of these provisions for getting out from under an excessive debt burden, this is probably not a total deterrent. Good attorneys will be able to evaluate an individual's position and explain the requirements thoroughly, so one can navigate the proverbial rough waters with some certainty. On the other side of the coin, Chapter 13 bankruptcy abuse should certainly be substantially reduced.
http://www.christianet.com/bankruptcy/chapter13bankruptcylaws.htm
Chapter 13 Attorney
A chapter 13 bankruptcy attorney is the person to call for professional assistance in deciding to go bankrupt and how the whole process works. The attorney will work with clients so that filing will help them rehabilitate their credit through the restrictions and limitations of the court. When filing, debtors pay off some debts, but it is on much better terms, i.e., lower or no interest. Also, clients don't have to sell assets under a Chapter 13 if they are working and can make payments. The United States Code allows up to five years to pay off creditors, and the process is completely supervised by the court. The chapter 13 bankruptcy attorney will make sure the debtor's interests are protected.
"The righteous shall inherit the land, and dwell therein for ever" (Psalm 37:29). Despite the fact that our earthly possessions mean little in the long run, the debtor is allowed to keep all of his property under Chapter 13. Currently, a bankruptcy lawyer will take into account the debtor's regular monthly payments such as house and car notes, and utilities when deciding what the monthly payments will be. After the attorney has worked out a plan with the court, the client begins making payments 30 to 45 days after the case begins. Payments are made to the trustee who has been appointed by the court, and he disburses the funds to the creditors. The creditors are required by law to strictly follow the terms of the repayment plan. They can no longer look to the debtor directly for payment. After the payment plan is filed, there will be a confirmation hearing before a judge. Clients may appear at the hearing, and if they have a problem with the plan, objections are permitted. The judge will hear both sides before confirming the plan. Once the plan is confirmed, payments can begin.
The ability to make the monthly payments is a necessary part of a Chapter 13, so the client must be gainfully employed, or at least have prospects of future income. Those who need to file because of job loss and trouble finding employment may have to file under Chapter 7, or find some other way out of indebtedness, such as consolidation or an equity loan. When consulting a Chapter 13 bankruptcy attorney, he will lay out the options and will know his client's ability to obtain new loans or credit without the court's permission. The debtor's bank may be one of those which offers "secured" credit cards, those with a certain amount of money put on it by the cardholder. Two years after going bankrupt, clients will once again be eligible for mortgage loans on the same terms as someone who never filed for bankruptcy with a bankruptcy lawyer.
When the new rules for filing are in place, the plan will be based on total income, without the payments mentioned above being a consideration. This is going to make it harder to file unless the debtor's income is below the local poverty level. It may require the client to sell their house and car, and move to a less expensive neighborhood in order to meet the debt payback requirements. Consultation with a Chapter 13 bankruptcy attorney will provide the details about filing before the new rules go into effect, and what to expect if debtors wait.
Any bankruptcy lawyer will say that any of the chapters should be a last resort, because it is there to allow debtors to get out from under and make a fresh start. Although the record of going bankrupt stays on a credit report for ten years, it won't be that long before filers can get credit again. The more time that passes afterward, the better the chances for obtaining credit. It is expected that after filing, filers will be more careful with managing debt in the future. However, should filers find difficulty again, they are allowed to file for protection again in six years.
There are some important facts a good bankruptcy lawyer will point out concerning the process: Clients get legal protection from creditors; most of debt can be eliminated; financial ruin can be stopped, enabling a fresh start. The counselor will also say that debtors will still have some debt to pay, will have to go to court, and the disadvantages to not filing. Filers can find a local law firm either on the Internet or in the local telephone book. Asking around if friends and family can recommend one is also a good idea. Most options are reputable, but debtors need to be sure that the counselor is licensed and has a solid reputation. Before taking any action toward bankruptcy, filers should consult with a good Chapter 13 law office to determine if this is the best action for the particular situation.
http://www.christianet.com/bankruptcy/bankruptcylawyer.htm
"The righteous shall inherit the land, and dwell therein for ever" (Psalm 37:29). Despite the fact that our earthly possessions mean little in the long run, the debtor is allowed to keep all of his property under Chapter 13. Currently, a bankruptcy lawyer will take into account the debtor's regular monthly payments such as house and car notes, and utilities when deciding what the monthly payments will be. After the attorney has worked out a plan with the court, the client begins making payments 30 to 45 days after the case begins. Payments are made to the trustee who has been appointed by the court, and he disburses the funds to the creditors. The creditors are required by law to strictly follow the terms of the repayment plan. They can no longer look to the debtor directly for payment. After the payment plan is filed, there will be a confirmation hearing before a judge. Clients may appear at the hearing, and if they have a problem with the plan, objections are permitted. The judge will hear both sides before confirming the plan. Once the plan is confirmed, payments can begin.
The ability to make the monthly payments is a necessary part of a Chapter 13, so the client must be gainfully employed, or at least have prospects of future income. Those who need to file because of job loss and trouble finding employment may have to file under Chapter 7, or find some other way out of indebtedness, such as consolidation or an equity loan. When consulting a Chapter 13 bankruptcy attorney, he will lay out the options and will know his client's ability to obtain new loans or credit without the court's permission. The debtor's bank may be one of those which offers "secured" credit cards, those with a certain amount of money put on it by the cardholder. Two years after going bankrupt, clients will once again be eligible for mortgage loans on the same terms as someone who never filed for bankruptcy with a bankruptcy lawyer.
When the new rules for filing are in place, the plan will be based on total income, without the payments mentioned above being a consideration. This is going to make it harder to file unless the debtor's income is below the local poverty level. It may require the client to sell their house and car, and move to a less expensive neighborhood in order to meet the debt payback requirements. Consultation with a Chapter 13 bankruptcy attorney will provide the details about filing before the new rules go into effect, and what to expect if debtors wait.
Any bankruptcy lawyer will say that any of the chapters should be a last resort, because it is there to allow debtors to get out from under and make a fresh start. Although the record of going bankrupt stays on a credit report for ten years, it won't be that long before filers can get credit again. The more time that passes afterward, the better the chances for obtaining credit. It is expected that after filing, filers will be more careful with managing debt in the future. However, should filers find difficulty again, they are allowed to file for protection again in six years.
There are some important facts a good bankruptcy lawyer will point out concerning the process: Clients get legal protection from creditors; most of debt can be eliminated; financial ruin can be stopped, enabling a fresh start. The counselor will also say that debtors will still have some debt to pay, will have to go to court, and the disadvantages to not filing. Filers can find a local law firm either on the Internet or in the local telephone book. Asking around if friends and family can recommend one is also a good idea. Most options are reputable, but debtors need to be sure that the counselor is licensed and has a solid reputation. Before taking any action toward bankruptcy, filers should consult with a good Chapter 13 law office to determine if this is the best action for the particular situation.
http://www.christianet.com/bankruptcy/bankruptcylawyer.htm
Tuesday, August 28, 2007
Bankruptcy and Credit Repair
Has your life been suffocated by debt and bankruptcy looks like the only way to breathe? If you have been controlled by debt and want out you need to understand how bankruptcy and credit repair go hand-in-hand. Today, filing for bankruptcy is not as easy as it was two years ago. With new bankruptcy laws now in place, things have changed. Currently, anyone interested in filing for bankruptcy must first go through credit counselling prior to filing.
In addition, before old debt can just be wiped out, further counselling on debt management and budgeting is required. Then, for people with higher income, they will no longer be able to file for Chapter 7 but instead, must repay a portion of their debt as outlined in Chapter 13. This new law makes it much harder to file and it creates a problem in finding a bankruptcy attorney to take the case. Therefore, rather than file for bankruptcy, credit repair may be a better, long-term solution.
Now, if you have already filed for bankruptcy and now your credit report looks bad, credit repair is still an option. The good news is that whether your bankruptcy is new or old, there are options for improving your credit score. With a bankruptcy, the goal is to have all your debt discharged, which makes life easier and credit better. Unfortunately, the bankruptcy just adds negativity to a credit report. Then, when you consider that credit bureaus are allowed to report a bankruptcy for 7 to 10 years, you live with a smudge that can make financial situations difficult.
The bottom line is that trying to qualify for credit or a mortgage loan after bankruptcy is near impossible unless the credit is cleaned up. Therefore, remember that bankruptcy, credit repair programs do exist but you need to be very careful when choosing a company in that they are not all honest. These special programs are designed to improve your credit and raise your FICO score even after filing a bankruptcy. However, keep in mind that cleaning up credit does not happen overnight, it takes time.
Look at it this way, bankruptcy is a legal issue. Therefore, while you may be thinking about filing for bankruptcy as a means of getting a fresh financial start, be careful and consider all your options first. For some people, there are times when a bankruptcy may be the only way to get back on track but today, bankruptcy credit repair is becoming more and more common, especially with the new laws in effect. Even thought the bankruptcy will stay on your credit report for the 7 to 10 years, during that time, you can do other things to rebuild and establish good credit.
In other words, while the bankruptcy may reside on your credit report for years, many lenders and creditors will look beyond the bankruptcy to see what else you have been doing. This means if you pay your other bills on time for an extended period, pay off some of your excessive debt, and show that you are creditworthy, creditors will eventually be willing to work with you. Yes, a bankruptcy will hurt but by using credit repair for other items, you can improve your score and again start to enjoy financial freedom.
Just remember that thousands of companies exist that will promise you bankruptcy credit repair in the form of removing the bankruptcy from your credit report. The truth is that this is impossible. Therefore, while some companies can offer bankruptcy credit repair and improve your credit, actually promising to remove the bankruptcy prior to the 7 to 10 years is nothing more than a scam. These companies will gladly take your $200 to $500 and in return, do nothing for you. Just be wise when working with a credit repair company and above all, educate yourself on your legal rights and the way in which credit bureaus work so you know what is and is not possible.
http://www.creditrepaircommando.com/bankruptcy-credit-repair.html
In addition, before old debt can just be wiped out, further counselling on debt management and budgeting is required. Then, for people with higher income, they will no longer be able to file for Chapter 7 but instead, must repay a portion of their debt as outlined in Chapter 13. This new law makes it much harder to file and it creates a problem in finding a bankruptcy attorney to take the case. Therefore, rather than file for bankruptcy, credit repair may be a better, long-term solution.
Now, if you have already filed for bankruptcy and now your credit report looks bad, credit repair is still an option. The good news is that whether your bankruptcy is new or old, there are options for improving your credit score. With a bankruptcy, the goal is to have all your debt discharged, which makes life easier and credit better. Unfortunately, the bankruptcy just adds negativity to a credit report. Then, when you consider that credit bureaus are allowed to report a bankruptcy for 7 to 10 years, you live with a smudge that can make financial situations difficult.
The bottom line is that trying to qualify for credit or a mortgage loan after bankruptcy is near impossible unless the credit is cleaned up. Therefore, remember that bankruptcy, credit repair programs do exist but you need to be very careful when choosing a company in that they are not all honest. These special programs are designed to improve your credit and raise your FICO score even after filing a bankruptcy. However, keep in mind that cleaning up credit does not happen overnight, it takes time.
Look at it this way, bankruptcy is a legal issue. Therefore, while you may be thinking about filing for bankruptcy as a means of getting a fresh financial start, be careful and consider all your options first. For some people, there are times when a bankruptcy may be the only way to get back on track but today, bankruptcy credit repair is becoming more and more common, especially with the new laws in effect. Even thought the bankruptcy will stay on your credit report for the 7 to 10 years, during that time, you can do other things to rebuild and establish good credit.
In other words, while the bankruptcy may reside on your credit report for years, many lenders and creditors will look beyond the bankruptcy to see what else you have been doing. This means if you pay your other bills on time for an extended period, pay off some of your excessive debt, and show that you are creditworthy, creditors will eventually be willing to work with you. Yes, a bankruptcy will hurt but by using credit repair for other items, you can improve your score and again start to enjoy financial freedom.
Just remember that thousands of companies exist that will promise you bankruptcy credit repair in the form of removing the bankruptcy from your credit report. The truth is that this is impossible. Therefore, while some companies can offer bankruptcy credit repair and improve your credit, actually promising to remove the bankruptcy prior to the 7 to 10 years is nothing more than a scam. These companies will gladly take your $200 to $500 and in return, do nothing for you. Just be wise when working with a credit repair company and above all, educate yourself on your legal rights and the way in which credit bureaus work so you know what is and is not possible.
http://www.creditrepaircommando.com/bankruptcy-credit-repair.html
Post Bankruptcy Credit Repair
Although bankruptcy is not something any person wants to go through, it is a part of life for many. Sometimes, debt just becomes too overwhelming and no matter how hard you try, bankruptcy becomes inevitable. You might find yourself in a bad divorce situation, perhaps you just lost a spouse, or you might have just made some poor decisions from a financial perspective. No matter what, you still have rights. This article will address post-bankruptcy credit repair, showing you how to “start over”.
For most people having gone through bankruptcy, they feel beat down and unworthy. You can stand up for yourself and use the laws in place to help you get back on your feet. You are certainly not the only or the last person ever found in this situation so pull yourself up by your bootstraps and take chart. Post-bankruptcy credit repair is an excellent opportunity to clean up old credit history and start anew so you can enjoy the things in life you deserve.
What happens is that once you file for bankruptcy and it is discharged, the debts are reported on the credit report as “zero balance”. Keep in mind that a bankruptcy can remain on your credit report for up to 10 years but that does not mean you cannot enjoy buying power. One of the ways to enjoy post-bankruptcy credit repair is to re-establish yourself with a secured credit card. You might be thinking that was what got you into trouble in the first place, why would you want a card. Well, a secured card is different.
With this, you can choose a Visa or MasterCard, which is issued by a bank. You would be required to have a savings account at that particular bank, which would be used for collateral toward purchases. Therefore, let us say you were given a $300 credit line. You would open a savings account with a minimum of $300. You can spend on that card up to $300 just as you would with a traditional credit card but if at any time you were to be late on a payment or default, the bank would take the money required from the savings account, which you would not have access to. Therefore, you enjoy post-bankruptcy credit repair while the bank is secured.
Another post-bankruptcy credit repair option would be to buy a car from someone that advertises they specialize in loans specifically for people who have experienced bad credit, even bankruptcy. The good side of this is that you get the car and have a great opportunity to show creditors that even with a bankruptcy on your credit report, you are still trying and creditworthy. The downside is that you can expect to pay high interest rates so there is trade off.
Just remember that with any type of post-bankruptcy credit repair, you want to be careful to avoid the very, same traps that ensnared you before landing you in hot water. Too often, people having filed for bankruptcy will find their mailbox inundated with all types of unsecured credit card offers. The reason – you do not owe anyone money. Therefore, even though you filed for bankruptcy, all income is just that, income and not payments. This means companies are willing to take a small risk. Unfortunately, unsecured credit cards mean you can spend, be late, and miss payments altogether, and all that would happen is you would have another negative remark on your credit report while the company would have to pay an attorney to hunt you down. This is danger, as you can imagine.
In truth, you have too many good, post-bankruptcy credit repair options to be setting yourself up for failure. Just be smart and make wise choices. You can always work with a reputable credit counselor to learn all the options you have. Bankruptcy is not pretty but it is also not the end of the world. You will have to work to get back on track and improve your credit score but in time and by doing it the right way, you can and you will!
http://www.creditrepaircommando.com/post-bankruptcy-credit-repair.html
For most people having gone through bankruptcy, they feel beat down and unworthy. You can stand up for yourself and use the laws in place to help you get back on your feet. You are certainly not the only or the last person ever found in this situation so pull yourself up by your bootstraps and take chart. Post-bankruptcy credit repair is an excellent opportunity to clean up old credit history and start anew so you can enjoy the things in life you deserve.
What happens is that once you file for bankruptcy and it is discharged, the debts are reported on the credit report as “zero balance”. Keep in mind that a bankruptcy can remain on your credit report for up to 10 years but that does not mean you cannot enjoy buying power. One of the ways to enjoy post-bankruptcy credit repair is to re-establish yourself with a secured credit card. You might be thinking that was what got you into trouble in the first place, why would you want a card. Well, a secured card is different.
With this, you can choose a Visa or MasterCard, which is issued by a bank. You would be required to have a savings account at that particular bank, which would be used for collateral toward purchases. Therefore, let us say you were given a $300 credit line. You would open a savings account with a minimum of $300. You can spend on that card up to $300 just as you would with a traditional credit card but if at any time you were to be late on a payment or default, the bank would take the money required from the savings account, which you would not have access to. Therefore, you enjoy post-bankruptcy credit repair while the bank is secured.
Another post-bankruptcy credit repair option would be to buy a car from someone that advertises they specialize in loans specifically for people who have experienced bad credit, even bankruptcy. The good side of this is that you get the car and have a great opportunity to show creditors that even with a bankruptcy on your credit report, you are still trying and creditworthy. The downside is that you can expect to pay high interest rates so there is trade off.
Just remember that with any type of post-bankruptcy credit repair, you want to be careful to avoid the very, same traps that ensnared you before landing you in hot water. Too often, people having filed for bankruptcy will find their mailbox inundated with all types of unsecured credit card offers. The reason – you do not owe anyone money. Therefore, even though you filed for bankruptcy, all income is just that, income and not payments. This means companies are willing to take a small risk. Unfortunately, unsecured credit cards mean you can spend, be late, and miss payments altogether, and all that would happen is you would have another negative remark on your credit report while the company would have to pay an attorney to hunt you down. This is danger, as you can imagine.
In truth, you have too many good, post-bankruptcy credit repair options to be setting yourself up for failure. Just be smart and make wise choices. You can always work with a reputable credit counselor to learn all the options you have. Bankruptcy is not pretty but it is also not the end of the world. You will have to work to get back on track and improve your credit score but in time and by doing it the right way, you can and you will!
http://www.creditrepaircommando.com/post-bankruptcy-credit-repair.html
The New Bankruptcy Law - What it Means to You
Years ago, just about anyone could file for bankruptcy. As long as they could show an imbalance of debt-to-income ratio and an overload of debt, they would quality. Well, times have changed. With so many millions of people now in debt and numbers growing, the government stepped in and said, “Enough is enough.” While some of the new bankruptcy laws are good, others might be considered not so good.
On October 17, 2005, a new bankruptcy law went into affect as a means of providing more protection for consumers. Officially known as the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, this law was signed in by President George Bush, which covers many changes to include debtors being required to pass strict rules to qualify. Through rigid testing, a determination is made whether Chapter 7 or Chapter 13 bankruptcy can be filed.
As you will discover, quite a bit of controversy surrounds this new law and for good reason. People supporting BAPCPA agree that it prohibits debtors who can afford to pay off debts from filing for bankruptcy, thus abusing the system. On the other end of the spectrum are those who do not support BAPCPA. For these individuals, the consensus is that the law is too strict. Regardless, just about everyone agrees that the changes are indeed the most significant law passed in several decades.
Again, opinions about the new bankruptcy conflict and considering the political motives and various viewpoints, it can all seem very confusing. The truth is that using bankruptcy to erase debt is a necessary evil for people who would otherwise have not way to get out of debt, whether from illness, loss of job, family death, and so on. In the past 20 years, the number of bankruptcies has jumped from 280,000 to 1.5 million! In fact, in just the past 10 years, one million people have filed for bankruptcy every year!
The downside to bankruptcy is that for each person unable to pay off debt, means someone else has to pick up the slack, which is the system by which we live. With so much debt and numbers staggering, the bankruptcy reform was designed to prevent the laws meant to help people from being abused. Obviously, bankruptcy in any case should be a last resort since once its done, it will remain on the person’s credit report for the next 10 years, meaning financial power is diminished although not impossible.
The truth is that the benefits that bankruptcy affords in wiping out debt needs to outweigh any negative aspects, which is something any person contemplating this action should consider. For most people, they would rather not file for bankruptcy but in some cases, this action is inevitable. The new bankruptcy law, BAPCPA, most definitely makes it more of a challenge for people who can afford other options out of the financial situation. Below are the changes this new bankruptcy brings:
· During the mandatory 180-day period prior to filing bankruptcy, you would have to go through a special briefing by an approved not-for-profit credit and budget, counseling agency. This agency must provide you with information outlining various counseling services to help you out of the situation. Additionally, this agency must perform a budget analysis. Then, if you were unable to pay for the service, it would be offered to you at no charge.
· Next, for you to qualify for Chapter 7 bankruptcy under the new law, which is the option that gives you a clean slate by wiping out debt, you would have to have an income level below the median income for the same size family living within your state or undergo a bankruptcy means test. This particular test is somewhat complex and considered strict when it comes to expenses. For instance, you would be allowed $1,500 annually per child under age 18 for expenses associated with private education no matter the actual expense.
· If you had an income more than the median income level for the same size family living within your state and you were able to pay a minimum of $6,000 over a five-year period or $100 monthly, then you would be required to file bankruptcy under Chapter 13, which means a portion of your debt would have to be repaid.
· A bankruptcy lawyer is required to certify your financial statement to the court. In fact, the lawyer will now be held financially responsible should any of your statements be false or misleading. Because so much responsibility has now fallen back on the lawyer, you can expect fees for filing bankruptcy to be much higher.
· The cost of filing a Chapter 7 bankruptcy has increased fro $155 to $200 and for Chapter 13 bankruptcy, the cost has decreased from $155 to $150.
For creditors, requirements under the new bankruptcy law have changed as well. These include the following:
· Under the new bankruptcy law, the Federal Reserve Board is required to study the question of, “Is there a connection between credit card debts developed in college with bankruptcies?” With so much research on the issue, a tremendous amount of documentation shows there is indeed a strong connection. The primary problem is that credit card companies swoop down over innocent college students with little money, making it far too easy for them to charge!
· The next change for creditors under this new bankruptcy law is that creditors cannot cancel and must display payback time. In other words, a creditor cannot cancel a credit card if the consumer pays it off. Additionally, the creditor is required to list the amount of time it will take to payoff the balance by the consumer paying only a minimum payment. This means now, a creditor must show that a $5,000 balance at 17% requiring a 2% payment will take a whopping 40 years to pay off!
· Third, bank regulators are now mandated to study whether credit card companies are issuing cards indiscriminately, without consideration to a person’s ability to repay. Credit card companies must also be studies to determine if they are actually key contributors to bankruptcy.
As the debtor, there are a few other requirements to consider in addition to those already mentioned.
· If there were any charges made on a credit card within the first three months after bankruptcy, you would be required to pay them in full.
· The bankruptcy courts have never given much credence to child support but the new law now sets a higher priority on both child support and alimony. With this, your income from child support and/or alimony may now be considered whereas with the old law, it was typically overlooked.
· IRAs are another factor to consider under the new bankruptcy law. Although bankruptcy should protect any money put aside in an education IRA, it also puts a cap on what things can be shielded from creditors in a Roth or other IRA. Interestingly, the cap is $1 million.
While all of these changes bring about great concern for people thinking about filing bankruptcy, other factors in the new law raise even more concern.
· Living expenses can now be dictated by the court. The concern is that most people are not sure the law can dictate a reasonable amount for living expenses. The reason is that different parts of the country are dramatically different. For example, if you live in the State of California, cost of living is 50% or more than the west coast. The question that has risen is “How can any court dictate ‘reasonable’ living expenses accurately”?
· Assets cannot be shielded by the debtor by moving to Texas or Florida, or buying a high-end home. In other words, if the rich decide to move to a different state such as Florida or Texas as a means of benefiting from a higher state homestead exemption, the new law no longer allows this.
· Auto loans are also a concern under the new bankruptcy law. In this case, the full amount of the auto loan must be paid off or surrendered to repossession, even if the automobile is not worth the amount of outstanding balance. Unfortunately, we have all seen where a great car salesman sells a car with high interest and ridiculously high payments, more than the person can afford. After having the automobile for five or six months, he or she realizes that the payments are more than can be afforded. The only option is to file for bankruptcy. Under the old law, the car would be surrendered and the debt wiped out. Under the new law, the amount of the debt must be paid in full regardless of the balance!
· Renter evictions are also hit by the new bankruptcy law. Now, landlords are able to evict tenants that have fallen victim to bankruptcy much easier. While the old law provided some protection, the new law means if you fall behind on rent payments, you can be evicted quicker and easier.
· Finally, creditors are now permitted to ask the courts to dissolve the established bankruptcy plan if you are late filing your paperwork to include copies of paycheck stubs, tax returns, employment verification, bank statements, and so on.
In summary, the new bankruptcy law has advantages and disadvantages. With the freedom in which credit was issued having increased over the years, as well as contribution to credit card company’s bottom line, changes had to be made. Although some of the new laws seem a bit harsh, the goal is to teach people to be more financially responsible. However, the new laws are also designed to help the people that REALLY need the help, not those just looking for a fast and easy way out. The key to the new bankruptcy law working is all about balance, social and economic balance.
While the changes with the bankruptcy law are certainly not perfect, the bottom line is that they are final. Therefore, reaction will occur but the law will stay. Keep in mind that as debt and the need for solutions continues it is likely that additional amendments will surface some day.
http://www.creditrepaircommando.com/new-bankruptcy-law.html
On October 17, 2005, a new bankruptcy law went into affect as a means of providing more protection for consumers. Officially known as the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA, this law was signed in by President George Bush, which covers many changes to include debtors being required to pass strict rules to qualify. Through rigid testing, a determination is made whether Chapter 7 or Chapter 13 bankruptcy can be filed.
As you will discover, quite a bit of controversy surrounds this new law and for good reason. People supporting BAPCPA agree that it prohibits debtors who can afford to pay off debts from filing for bankruptcy, thus abusing the system. On the other end of the spectrum are those who do not support BAPCPA. For these individuals, the consensus is that the law is too strict. Regardless, just about everyone agrees that the changes are indeed the most significant law passed in several decades.
Again, opinions about the new bankruptcy conflict and considering the political motives and various viewpoints, it can all seem very confusing. The truth is that using bankruptcy to erase debt is a necessary evil for people who would otherwise have not way to get out of debt, whether from illness, loss of job, family death, and so on. In the past 20 years, the number of bankruptcies has jumped from 280,000 to 1.5 million! In fact, in just the past 10 years, one million people have filed for bankruptcy every year!
The downside to bankruptcy is that for each person unable to pay off debt, means someone else has to pick up the slack, which is the system by which we live. With so much debt and numbers staggering, the bankruptcy reform was designed to prevent the laws meant to help people from being abused. Obviously, bankruptcy in any case should be a last resort since once its done, it will remain on the person’s credit report for the next 10 years, meaning financial power is diminished although not impossible.
The truth is that the benefits that bankruptcy affords in wiping out debt needs to outweigh any negative aspects, which is something any person contemplating this action should consider. For most people, they would rather not file for bankruptcy but in some cases, this action is inevitable. The new bankruptcy law, BAPCPA, most definitely makes it more of a challenge for people who can afford other options out of the financial situation. Below are the changes this new bankruptcy brings:
· During the mandatory 180-day period prior to filing bankruptcy, you would have to go through a special briefing by an approved not-for-profit credit and budget, counseling agency. This agency must provide you with information outlining various counseling services to help you out of the situation. Additionally, this agency must perform a budget analysis. Then, if you were unable to pay for the service, it would be offered to you at no charge.
· Next, for you to qualify for Chapter 7 bankruptcy under the new law, which is the option that gives you a clean slate by wiping out debt, you would have to have an income level below the median income for the same size family living within your state or undergo a bankruptcy means test. This particular test is somewhat complex and considered strict when it comes to expenses. For instance, you would be allowed $1,500 annually per child under age 18 for expenses associated with private education no matter the actual expense.
· If you had an income more than the median income level for the same size family living within your state and you were able to pay a minimum of $6,000 over a five-year period or $100 monthly, then you would be required to file bankruptcy under Chapter 13, which means a portion of your debt would have to be repaid.
· A bankruptcy lawyer is required to certify your financial statement to the court. In fact, the lawyer will now be held financially responsible should any of your statements be false or misleading. Because so much responsibility has now fallen back on the lawyer, you can expect fees for filing bankruptcy to be much higher.
· The cost of filing a Chapter 7 bankruptcy has increased fro $155 to $200 and for Chapter 13 bankruptcy, the cost has decreased from $155 to $150.
For creditors, requirements under the new bankruptcy law have changed as well. These include the following:
· Under the new bankruptcy law, the Federal Reserve Board is required to study the question of, “Is there a connection between credit card debts developed in college with bankruptcies?” With so much research on the issue, a tremendous amount of documentation shows there is indeed a strong connection. The primary problem is that credit card companies swoop down over innocent college students with little money, making it far too easy for them to charge!
· The next change for creditors under this new bankruptcy law is that creditors cannot cancel and must display payback time. In other words, a creditor cannot cancel a credit card if the consumer pays it off. Additionally, the creditor is required to list the amount of time it will take to payoff the balance by the consumer paying only a minimum payment. This means now, a creditor must show that a $5,000 balance at 17% requiring a 2% payment will take a whopping 40 years to pay off!
· Third, bank regulators are now mandated to study whether credit card companies are issuing cards indiscriminately, without consideration to a person’s ability to repay. Credit card companies must also be studies to determine if they are actually key contributors to bankruptcy.
As the debtor, there are a few other requirements to consider in addition to those already mentioned.
· If there were any charges made on a credit card within the first three months after bankruptcy, you would be required to pay them in full.
· The bankruptcy courts have never given much credence to child support but the new law now sets a higher priority on both child support and alimony. With this, your income from child support and/or alimony may now be considered whereas with the old law, it was typically overlooked.
· IRAs are another factor to consider under the new bankruptcy law. Although bankruptcy should protect any money put aside in an education IRA, it also puts a cap on what things can be shielded from creditors in a Roth or other IRA. Interestingly, the cap is $1 million.
While all of these changes bring about great concern for people thinking about filing bankruptcy, other factors in the new law raise even more concern.
· Living expenses can now be dictated by the court. The concern is that most people are not sure the law can dictate a reasonable amount for living expenses. The reason is that different parts of the country are dramatically different. For example, if you live in the State of California, cost of living is 50% or more than the west coast. The question that has risen is “How can any court dictate ‘reasonable’ living expenses accurately”?
· Assets cannot be shielded by the debtor by moving to Texas or Florida, or buying a high-end home. In other words, if the rich decide to move to a different state such as Florida or Texas as a means of benefiting from a higher state homestead exemption, the new law no longer allows this.
· Auto loans are also a concern under the new bankruptcy law. In this case, the full amount of the auto loan must be paid off or surrendered to repossession, even if the automobile is not worth the amount of outstanding balance. Unfortunately, we have all seen where a great car salesman sells a car with high interest and ridiculously high payments, more than the person can afford. After having the automobile for five or six months, he or she realizes that the payments are more than can be afforded. The only option is to file for bankruptcy. Under the old law, the car would be surrendered and the debt wiped out. Under the new law, the amount of the debt must be paid in full regardless of the balance!
· Renter evictions are also hit by the new bankruptcy law. Now, landlords are able to evict tenants that have fallen victim to bankruptcy much easier. While the old law provided some protection, the new law means if you fall behind on rent payments, you can be evicted quicker and easier.
· Finally, creditors are now permitted to ask the courts to dissolve the established bankruptcy plan if you are late filing your paperwork to include copies of paycheck stubs, tax returns, employment verification, bank statements, and so on.
In summary, the new bankruptcy law has advantages and disadvantages. With the freedom in which credit was issued having increased over the years, as well as contribution to credit card company’s bottom line, changes had to be made. Although some of the new laws seem a bit harsh, the goal is to teach people to be more financially responsible. However, the new laws are also designed to help the people that REALLY need the help, not those just looking for a fast and easy way out. The key to the new bankruptcy law working is all about balance, social and economic balance.
While the changes with the bankruptcy law are certainly not perfect, the bottom line is that they are final. Therefore, reaction will occur but the law will stay. Keep in mind that as debt and the need for solutions continues it is likely that additional amendments will surface some day.
http://www.creditrepaircommando.com/new-bankruptcy-law.html
Credit Repair After Bankruptcy
Going through a bankruptcy is a difficult time. Probably the worst aspect is the ten years the bankruptcy will appear on your credit report. However, if you have gone through this process, you need to know that you have options for credit repair after bankruptcy. Although the road will be somewhat challenging, remind yourself that bankruptcy does not have to be a black cloud that looms overheard. In addition, just because the bankruptcy will show up for ten years, you can still do several things during this time to improve your FICO credit score.
You need to look at your bankruptcy as a fresh start, a time of starting over where you can get your financial life back on track. Although the steps to credit repair after bankruptcy are not anything magical, they are sound and they do work. Remember, right now, you need to focus on your financial present, not so much on your credit history. This article will provide you with some great steps to credit repair after bankruptcy so you can rebuild credit to enjoy the things in life you deserve.
Our first step toward credit repair after bankruptcy is to consider joining a credit union. With this, you become a member, a part of the family of the credit union, not just another customer. Then, open both a checking and savings account at the credit union, keeping good record so these accounts will help you rebuild. Then, when you need to buy a home or car, or perhaps take out a personal loan, the credit union would be a much likelier source than a traditional bank.
Another step to credit repair after bankruptcy is to apply for a credit card. In this case, you have two options. First, you could go with a secured card, which means you open a bank-like account and deposit a certain amount of money in it. Whatever this amount is becomes the available credit on your card. In other words, the bank account is collateral. The other option is to choose a credit card designed to help people rebuild credit such as Orchard Bank or Capital One. Although you will pay higher interest, once you have the card and make regular payments on purchases made, your credit score will begin to climb.
Just as there are things you can do for credit repair after bankruptcy, there are also things you should do. For example, you want to avoid getting caught up in the trap of credit repair firms or agencies. These companies are run by scam artists that will ask for a large sum of money upfront, which is illegal, and then do virtually nothing in return. In fact, most of these so-called credit repair companies will suggest you make illegal steps toward credit repair, making the issue far worse.
Keep in mind that when it comes to credit repair after bankruptcy, some companies are legitimate and capable of helping but you will need to ask a lot of questions and check references. In addition, keep reminding yourself that you will get your credit under control. You will have a chance of reestablishing good credit so you can enjoy a sound financial future. However, be patient and work hard. Although you will not be able to start the rebuilding process immediately, it will come. Typically, we recommend you start about two years after the bankruptcy. This time is ideal for applying for a credit card, preferably one without an annual fee, and perhaps a personal loan.
The process for credit repair after bankruptcy is one that requires you to take small, baby steps. Obviously, a lender is not going to say, “Sure, you’re fine now – here’s a $10,000 loan”. You have to work to rebuild the trust of lenders. A simple credit card with a $300 credit line with payments made on time each month will do wonders for your credit score. As creditors notice you making payments on time and maintaining a workable and acceptable balance, they will begin to increase your credit line and be more willing to extend credit. Soon, you will again be considered a strong candidate for credit!
http://www.creditrepaircommando.com/creit-repair-after-bankruptcy.html
You need to look at your bankruptcy as a fresh start, a time of starting over where you can get your financial life back on track. Although the steps to credit repair after bankruptcy are not anything magical, they are sound and they do work. Remember, right now, you need to focus on your financial present, not so much on your credit history. This article will provide you with some great steps to credit repair after bankruptcy so you can rebuild credit to enjoy the things in life you deserve.
Our first step toward credit repair after bankruptcy is to consider joining a credit union. With this, you become a member, a part of the family of the credit union, not just another customer. Then, open both a checking and savings account at the credit union, keeping good record so these accounts will help you rebuild. Then, when you need to buy a home or car, or perhaps take out a personal loan, the credit union would be a much likelier source than a traditional bank.
Another step to credit repair after bankruptcy is to apply for a credit card. In this case, you have two options. First, you could go with a secured card, which means you open a bank-like account and deposit a certain amount of money in it. Whatever this amount is becomes the available credit on your card. In other words, the bank account is collateral. The other option is to choose a credit card designed to help people rebuild credit such as Orchard Bank or Capital One. Although you will pay higher interest, once you have the card and make regular payments on purchases made, your credit score will begin to climb.
Just as there are things you can do for credit repair after bankruptcy, there are also things you should do. For example, you want to avoid getting caught up in the trap of credit repair firms or agencies. These companies are run by scam artists that will ask for a large sum of money upfront, which is illegal, and then do virtually nothing in return. In fact, most of these so-called credit repair companies will suggest you make illegal steps toward credit repair, making the issue far worse.
Keep in mind that when it comes to credit repair after bankruptcy, some companies are legitimate and capable of helping but you will need to ask a lot of questions and check references. In addition, keep reminding yourself that you will get your credit under control. You will have a chance of reestablishing good credit so you can enjoy a sound financial future. However, be patient and work hard. Although you will not be able to start the rebuilding process immediately, it will come. Typically, we recommend you start about two years after the bankruptcy. This time is ideal for applying for a credit card, preferably one without an annual fee, and perhaps a personal loan.
The process for credit repair after bankruptcy is one that requires you to take small, baby steps. Obviously, a lender is not going to say, “Sure, you’re fine now – here’s a $10,000 loan”. You have to work to rebuild the trust of lenders. A simple credit card with a $300 credit line with payments made on time each month will do wonders for your credit score. As creditors notice you making payments on time and maintaining a workable and acceptable balance, they will begin to increase your credit line and be more willing to extend credit. Soon, you will again be considered a strong candidate for credit!
http://www.creditrepaircommando.com/creit-repair-after-bankruptcy.html
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